Five types of people who do not pay you, and what actually works with each one
They are not all the same person. Treating them the same is why chasing does not work.
By Mel Curwood. More than 25 years working across New Zealand business, and nearly a decade helping trades, contractors and blue-collar businesses get paid in full, on time, every time. Over 350 of them.
Not everyone who owes you money is the same kind of problem. That is why the same reminder works on one customer and bounces straight off another, and why chasing harder so rarely changes the outcome. There are five patterns we see behind unpaid invoices, again and again, and each one responds to something different.
Why the same reminder works on one customer and not another.
When an invoice goes past due, the response is usually the same one, every time. Another email. A firmer email. A phone call. A firmer phone call. And when that does not work, the conclusion is usually that they should have chased harder or sooner.
The reason it does not work is that the five situations behind an unpaid invoice have almost nothing in common with each other. One customer is embarrassed and avoiding you. One is testing whether you will hold. One genuinely cannot pay this month and is dreading the call. Sending all three the same reminder is not a strategy, it is a hope.
Once you can name which one you are looking at, this stops being something happening to you and starts being a set of decisions, some of which are yours.
1. They were never really going to pay.
The lifestyle debtor
They have done this to the business before yours, and the one before that. They burn and move on. They know the limits of the system better than you do.
The worst version of this one is the bully. They make your life so difficult, so exhausting, so personal, that you eventually just let it go.
That is exactly what they are counting on.
The counter-move
- A credit check before you start, not after the invoice is overdue. It takes minutes, and of the five this is the one you have the best chance of seeing coming.
- With the bully specifically, decide what you will do before you are worn out, and write it down. Exhaustion is the mechanism. If the decision is already made, being ground down cannot make it for you.
2. The dispute, real or convenient.
The dispute
Sometimes valid. Often not. But almost always it comes back to what was said, what was written, and what was not.
Something happens on site that the customer was not expecting. A job runs over scope. The communication fails somewhere through the hiccup, and what arrives is not a payment but a conversation: I am not paying that. I did not expect it to cost that much. I do not think it is fair.
A genuine issue and a delaying tactic wearing its clothes look almost identical from where you are standing. What tells them apart is your records, not your instinct.
The counter-move
- The paper trail, built before you need it. Clear scope, documented variations, changes approved in writing, expectations set before the surprise lands.
- The businesses who get paid protect themselves before a single dollar of work begins.
3. They did not see it coming either.
The unexpected
Sometimes something genuinely changes. A customer loses a major contract, becomes seriously unwell, hits a funding gap or is caught by something nobody could reasonably have predicted. Covid taught us that the world can simply fall apart while everyone is doing their best.
This one is not a villain and treating it like one costs you both the money and the relationship.
The counter-move
- Not a fight, but a framework. Find out early rather than letting it drift into months of silence.
- Formalise the arrangement in writing: clear amounts, clear dates, and a clear understanding of what happens if it is not kept. Compassion and structure are not in conflict, and the arrangement is what makes the compassion affordable.
4. Held to ransom for your own money.
The carrot
It arrives as a small ask. I will pay you if you just do this one extra thing. Sometimes there really is a final item to finish. Often there is not, and what is happening is that money you have already earned is being used as leverage for work you never agreed to do.
They are holding you to ransom for your own money. Your own money.
The counter-move
- Separate the two conversations, deliberately and out loud. What is owed for completed work is one discussion. What happens next is another. They are not a trade.
- If “while you are here” is costing you money on jobs, it is usually because yes is being said before it should be. The fix sits at the point of the ask, not at the invoice.
5. Fit in, or do not get the job.
The power imbalance
They know you need the contract more than they need you, and they use it. This is the one that arrives as an email announcing new terms rather than a conversation about them. Rebates that rise without discussion. Fees that appear. Payment timeframes set by the party who is not carrying the cost.
Not every delay in a contracting chain is deliberate. There are layers of sign-off, claims, retentions and genuine complexity. But when your business consistently carries the labour, the materials and the project risk while somebody further up the chain decides when the money moves, that is a commercial exposure, and it is worth naming as one.
The counter-move
- Price the risk into the terms rather than absorbing it silently. If you are going to keep working with them, the arrangement should reflect what you are actually carrying.
- Terms can do work here that conversation cannot. A clause that cancels rebates or discounts where payment is not made in full by the due date puts something on your side of the table.
- And know your real exposure with them before the next job, not after it.
What most of them have in common.
Four of those five are not bad people. That matters more than it sounds, because it changes what actually works.
Most non-payments do not start as bad intent. They start as misalignment, assumptions, or shifting circumstances.
Which is also why the businesses this happens to are so often good ones. Strong operators, long relationships, work delivered properly. The exposure did not come from being careless. It came from systems built when the jobs were smaller, and nobody having shown them where the risk was sitting until it was already sitting on them.
“We have never had a problem before” is not the same as being protected.
The lesson is not to stop trusting people. The lesson is to stop relying on trust alone.
This is not happening only to you.
Across New Zealand, Xero estimated that late payments cost small businesses $827 million in 2023, up from $456 million in 2021. An 81% rise in two years.
Behind that number are businesses, families and communities, many of them in the sectors carrying the highest costs, the biggest liability and the tightest margins. It has been treated as normal for a very long time, and it should not have been.
What you can do about this one, and what only changes on the next job.
Some of the counter-moves above work today, on the invoice in front of you. Most of them work by changing what happens before the next job starts, which is where the real leverage has been sitting the whole time.
That is not a reason to write this one off. Work out which of the five you are dealing with, because that decides what to do this week. Then use what it taught you on the next customer, where you still have every option open.
If you are in the middle of one right now, start here: what to do when you are not being paid for work you have done.